Brasília – The Brazilian federal government has set the 2013 primary surplus target, i.e. savings designed for paying interest on the public debt, at 155.9 billion reals (US$ 85 billion). The sum is equivalent to 3.1% of the estimated Gross Domestic Product (GDP) for that year. In 2012, savings are forecasted at 140 billion reals (US$ 76.3 billion). The figures are part of the Budget Directives Act (Lei de Diretrizes Orçamentárias – LDO) for 2013, which was submitted to the National Congress this Friday (13).
“The projections for actual economic growth and lowering of public debt cost will allow for the trend of decline in the net debt of the public non-financial sector in relation to the GDP,” according to a statement issued by the Ministry of Planning.
The federal government will account for 2.15 percentage points (108.1 billion reals, or US$ 58.9 bn) of the entire projected savings, and the remainder will be up to the states and municipalities to economize (47.8 billion reals, or US$ 26 bn). The projection is aimed at maintaining the downward curve in the net public debt-to-GDP ratio. The goal is to have the percentage down to 27.4% by 2015, as against 36.41% in 2011. The Budget Directives Act GDP growth forecast for 2013 is 5.5%, as against 4.5% this year.
According to the ministry, “these targets confirm the government’s commitment to fiscal responsibility, which will contribute to macroeconomic stability and to socially inclusive, sustained growth.”
The Brazilian minister of Planning, Miriam Belchior, informed that the government does not rule out discounting investment at up to 45.2 billion reals (US$ 24.6 bn) worth of investment made under the Growth Acceleration Programme (PAC, in the Portuguese acronym), a figure equivalent to 0.9% of the GDP, from the target surplus. “Our goal is to pursue the full [primary surplus] target, as we have been doing every year. This is a precaution we exercise so that in case some problem comes up, we will be able to preserve our investment, which is our priority,” she said.
Miriam also said federal state-owned companies remain target surplus-free. “Federal state-owned companies are discharged so that they are free to invest.”
*Translated by Gabriel Pomerancblum
